CBD is drawing the attention of CPG companies, including leading multinational brands. Given that the U.S. CBD market is expected to grow to $23.7B by 2023, it’s no surprise that many are looking to extend their product lines to include products containing CBD.
Beyond the CBD market potential, producers who use CBD derived from organic hemp are positioned to take advantage of organic market growth, too. According to the Organic Trade Association (OTA), the organic market’s “growth rate regularly outpaces that of the total food market” making it an exciting opportunity for businesses looking to market organic food and beverages. The U.S. organic food market is expected to reach $70.4B by 2025, while the global organic food and beverage market could reach $323B by the end of 2024. The potential doesn’t stop at food either; the natural and organic cosmetics global market is estimated to top $23.6B by 2025, representing a 9.4% compounded annual growth rate.
CBD and organic products—whether foods, beverages, or cosmetics—are akin to a match made in heaven, not just because they’re on a similar growth trajectory, but because they both speak to consumers’ increasing interest in natural products. Yet, while they often go hand in hand, not all CBD products are organic. Nor are all CBD suppliers able to claim organic certification.
Read on to better understand the market potential for organic CBD products and discover three ways to ensure the organic provenance of your CBD supply.
Why You Want to Use Organic CBD in Your Products
While organic products once represented a small corner of the market, this is no longer the case. Consumers are increasingly concerned about the harmful effects of pesticides on themselves, their families, the environment, and their animals, leading them to shift their purchasing behavior.
Organic has become a lifestyle choice for many Americans, and at least two-thirds of shoppers buy organic at least occasionally. These consumers are willing to pay a premium price for organic items because of both the health benefits and the environmentally friendly practices behind organic production.
Corporate commitment to sustainability is also becoming increasingly commonplace as some of the world’s largest brands like Hershey’s, Williams-Sonoma, and Colgate-Palmolive roll out strategic initiatives dedicated to reducing their carbon footprints, cutting supply chain emissions, and eliminating water waste. Brands looking to demonstrate sustainability can do so by incorporating organic into their product lines.
Bottom line: Educated consumers have more options for food, beverages, and cosmetics than ever before. To fully capitalize on the new CBD market, brands should consider incorporating organic hemp and CBD into their supply chain to ensure they meet consumer preferences and remain competitive.
Why It’s Important to Ensure Your CBD Supply is Organic
Hemp, the plant from which legal CBD is derived, is innately resistant to most pests and fungus. This means it can thrive without pesticides and other chemicals required to grow traditional crops. As an added bonus, hemp is carbon-negative, meaning it actually removes carbon dioxide from the atmosphere and is extremely environmentally friendly. These characteristics make hemp a sustainable crop and a natural fit for organic production.
Because of this, it’s easy for suppliers and manufacturers to make organic claims. But those claims may not be verifiable. In fact, false organic claims are on the rise. As the demand for organic hemp has outstripped the available supply, false organic claims are increasingly an issue with imported organic products, as well as domestically produced ones.
The USDA can impose fines for fraudulent organic certificates up to $17,952 per violation. If you perpetuate a false claim made by one of your suppliers, it’s possible you could be liable under advertising law for also making a false claim. For example, the FTC has filed complaints against Nu Skin International and Sharper Image for false advertising and perpetuating unsubstantiated claims in marketing materials, respectively, even though they were not the manufacturers of the products in question.
While the USDA provides oversight, it’s also incumbent upon producers to require that suppliers provide organic certification. If you or one of your suppliers are fined, aside from the financial hit and possible legal ramifications, it could leave a lasting mark on your brand reputation.
How to Know if Your CBD is Truly Organic
Give the increase in fraudulent organic claims, you can protect yourself by knowing how to correctly label your products and requiring that your CBD is verifiably organic. To claim your products are organic, they must comply with the USDA’s labeling regulations. You must be able to verify that all ingredients within the final product are also certified organic. For businesses looking to incorporate CBD into their products, this means you’ll need to look into your CBD supplier’s claims.
You can verify the validity of your supplier’s organic claims by looking for the following:
USDA Certified Organic Certificate. If a supplier is USDA Certified Organic, it means they have passed rigorous inspection standards and their processes meet USDA requirements. Request a copy of their certification and ensure it contains “NOP” or “USDA organic standards,” has an inspection date within the last year, and is accompanied by a profile or summary of the items and processes covered by the certification.
Organic Trade Association (OTA) Membership. Membership in the OTA demonstrates a commitment to ethical consumerism and prevention of organic fraud. An organization created to preserve the organic trade and protect the environment, farmers, the public, the OTA has invested in organic fraud prevention measures to help mitigate and prevent the occurrence of organic fraud inside and outside of the United States,
Verified Organic. A supplier’s use of Verified Organic demonstrates the highest commitment to organic supply chain transparency. Because you can see exactly what went into the product’s production, you gain the assurance you need to confidently label your products as organic. Verified Organic also builds brand trust and loyalty. By providing a unique QR code displayed on the product’s packaging, you can give your customers the ability (using free software and a mobile device) to see the farming practices and inputs that went into the product’s creation, from seed to shelf.
Ensure Organic CBD by Choosing Wisely
Organic CBD products give CPG brands the ability to extend their product lines and appeal to health- and environmentally-conscious consumers. But false organic claims abound. The more transparency you can build into your supply chain, the better. In addition to mitigating risks, your ability to trace your product from seed to shelf will establish a foundation of trust and brand loyalty with your customers.
Prioritizing CBD suppliers that are USDA Certified Organic, members of the Organic Trade Association, and using Verified Organic can provide the supply chain transparency you need to confidently bring organic CBD products to market.
To learn about Integrated CBD’s commitment to organic hemp-derived CBD production, visit www.integrated-cbd.com.